Exactly. And CRV might already do that when it launches (people will rush again to ycrv pool). I favor a wait and see approach. We also don’t know all of the products and timeframes Andre is launching yet—how should we distribute emissions across which products in what ratio? (Especially when we have near weekly/monthly major product launches
1 Like
The objective of token distribution is to garner awareness, attention and adoption. It’s not intended to be the ‘event’, it’s intended to be the teaser, trailer, the hook to get them interested. No more…
Making long term (potentially unchangable!) governance decisions based on short term price worries is bad governance.
It literally was the distribution mechanism for YFI. Not to mention COMP, CRV, much of META. Last week was the equivalent of an ICO in which you locked up collateral in order to claim a portion of the distribution. It was the equivalent of Edgeware’s lockdrop, but with the added bonus of providing a benefit to the system by adding liquidity. That made it much better than Edgeware’s lockdrop (not to mention the controversial signalling mechanism). But what wasn’t better about it was the fact that there was very little notice given to potential investors. If you didn’t have liquid capital within a week of the announcement, well you missed out.
I am coming at this from the viewpoint that it is an INCREDIBLE way to distribute a token that aligns the interests of the company, stakeholders, and users in a fair and equitable way all while driving usage and interest to the project. Doing it for only a week is a missed opportunity and even though a lower supply may mean that the token price stays higher, I don’t believe it adds value to anyone other than those who bought in the last week (of which I am one). There is very little evidence that people who participated in the last week will add any more value than those who will participate in the future. So from the viewpoint of yEarn, continuing the distribution incentivizes more people to join and provides a larger pool of stakeholders from which you might get great value.
4 Likes
What about a different way forward that may appeal to a larger group of us? There are clearly disagreements about inflation/distribution and related polices, but I am confident that from the most altruistic of us to the most greedy of us, nearly all of us want to see this project thrive. Here are some thoughts of a different mechanism. I am not committed to this, they are ideas for consideration and discussion.
Mint 12k YFI and put in the hands of the Multisig/DAO.
Sell 2k of that 12k YFI on the market over a set and publicly disclosed period of time (perhaps 250 each month over 8 months). Some of the proceeds could be used for immediate expenses (e.g., audits). Remaining proceeds could be invested in Yearn products to earn yield. This would be like dogfooding and would also show that we believe in the project. This may put downward pressure on the price of YFI for a short time, but would allow those interested in YFI an opportunity to buy in. At today’s prices that would inject approximately $8M for use by the project.
Remaining 10k of that 12k YFI could be staked for rewards (assuming this is where the community is headed). The YFI rewards pool (pool 4) was earning about $60k per week. Multisig/DAO would hold about 24% of all YFI (10k/42k) and could be expected to earn about $750,000 per year at that rate. If the use of Yearn products increases such that fees bring in twice as much, that would be about $1.5M / year for the Multisig/DAO.
In addition to the proceeds remaining from the sale of the initial 2k YFI. That $750,000 or $1.5M or whatever per year could be used for a variety of purposes. Audits? Dev funds? LP rewards could be paid as yCurve or yUSDC (or other y products). If YFI is determined necessary for a particular pool or for a particular time, those funds could be used to purchase YFI on the open market and then distributed.
This gets YFI minted; allows those interested in obtaining YFI to get in; and gives flexibility for paying expenses and also rewarding LPs with different types of incentives.
2 Likes
I agree with the 2k print for an audit. This is clearly defined cost/benefit. 10k printed for incentives, I am not seeing any statistics such as “we expect a 25% increase in users” or “we expect customers to use the platform 40% more months for getting YFI”
1 Like
@Joey Current proposals are for 20k more YFI with 75% (15k) for LP rewards over a several year period. Putting 10k aside causes less dilution, offers more flexibility, and lasts as long as the project lasts.
If it’s more valuable in your hands than in theirs, you’d be willing to offer a high enough price to get them to part with it.
YFI isn’t trying to be ‘money’, driving hodlers, it’s much more akin to equity. People who aren’t interested in increasing the value beyond it’s current market price will always be happy to sell to you. If you’re not willing to pay a market price to get current holders to part with their coin, then from a governance perspective, it’s already in the right hands.
1 Like
@karma9000 I agree with most of what you said. There will be pure speculators who are willing to pay for and hold YFI who are not also interested in governance. Whether we can or should try to stop speculation is another question (I think not). Regarless, just because YFI will flow to those who value it most does not mean that value capture will be the same.
For example, if you give YFI to farmers it may be sold to someone interested in governance, but the farmer captures the value. What if some or all of the next minted YFI were originally distrubuted to the project itself? In that case, it gets to the same place – someone who values it for governance – but the value is captured by the project rather than a farmer.
In my reply above, I suggested that the project sell 2k YFI, use what is needed for immediate expenses and put the rest in yearn products to earn yield. I think you and I agree that those 2k YFI will make it to those who value them most.
I agree with setting aside funds for the dao to use how it sees fit in the future.
I prefer setting aside funds as discussed here than predetermining the distribution as proposed by substreight
1 Like
The more I think about it, the more I am for a hard cap of 30k. I don’t think there needs to be any inflation at all. I will vote for lowly inflating models just to push the emission cap down, but will push for zero inflation.
I think the @yfi_whale model is best, mint 2k for the DAO directly, and 10k which is to be emitted with exceptionally low inflation over 10 years via staking or yield farming, 2k of which is paid to the DAO. This gives 4k to the DAO, and 8k emitted to LPs or stakers over ten years. It is enough dilution of governance in my opinion. The keys should then be burned.
This would put an effective hard cap on circulating supply for year one. If entites wish to participate in governance, they can buy. We should not aim to make “the people’s token” by introducing bogus inflationary schemes.
We should focus on making the best product available, and on attracting as much money as possible. This is achieved by having well vested heavy capital committed governors which ideally represent the best DeFi products on the market.
4 Likes
I think this is very fair. So far we are the best at what we do and we need to keep that up.
1 Like
I still dont agree with a 10k print to just give away. Think like this:
-
Print 10k for DAO to hold. Still want to give it away but by USD value.
-
Start giveaway at $6000 per week. Translation: higher yield for LP; secondary translation: giving up a smaller percent of the 10k YFI tokens per week because value goes up
A lot changes over time. I think any commitment on what to do with the 10k is premature. Agreeing on a 12k print and holding it in the DAO would be preferrable for 1 vote than doing that plus agreeing on how the distribution will go
Edit: i actually want to elaborate a little further including an idea i saw previously on this forum that caught a little heat but i liked it. Yearn B token. Why dont we print a secondary token for incentives? It can still share in rewards of the given platform (such as yearn token for yearn platform, yswap token for yswap platform) but does not govern or vote.
I think people would be much more agreeable to a “print” if it was more of a profit share like this above edited idea than a inflation on their hard bought YFI. This model still provides LPs what they want. I really think 30k YFI is fine as a hard cap. We could even consider redirecting the aDAI that traditionally is used to back YFI, 5% to LP, 5% to devs, etc. Why so quick to think print is the only way?
Edit 2: if we do add a print, i would hope we also vote 5% of our income goes to burn to even it out
For the 50k decay scenario what % will be allocated towards technical development, marketing, and governance?
Don’t see why YFI needs large liq incentives. Users are already benefiting from the liquidity mining schemes of other protocols, and yearn will optimize that. It should attract liquidity regardless as users will be farming tokens indirectly.
There’s no need to add extra YFI to incentivize, the incentives are already there. Not against a small amount but don’t think it’s really necessary.
2 Likes
The on-chain proposals regarding emission models should proceed in steps. I would propose the following procedure.
prop1: settle maximum inflation
FOR: hard cap of 50k or less over 10 years
AGAINST: do nothing
Here do noting means more discussion. This proposal will likely pass. Next, each candidate model should be approved before final vote
prop2a: @Substreight 50k model
FOR: acceptable
AGAINST: not acceptable
prop2b: @yfi_whale model
FOR: acceptable
AGAINST: not acceptable
Discussion period, now that candidate emission models have been approved. Either add new emission models or go to final vote.
prop3a: Approve emission models for vote
FOR: It is time to select a candidate model
AGAINST: We need to consider more models
prop3b: settle emission model between approved models
MODEL1: @Substreight
MODEL2: @yfi_whale
MODEL3: Do nothing
@milkyklim, @andre.cronje For this, voting contracts must support non-binary voting like the case of prop3b. Also, prop3b should be settled by simple majority. There is risk here, but let’s trust the universe to select the right model for us.
It is important to move “slowly yet quickly” here. We do not want to get stuck on governance regarding token emission, but we want to do our due diligence and consider all steps in the process.
Model3: by USD flat rate of $15,000 per week whatever that comes out to be in YFI tokens as distribution and allow distribution to go on endless with 50% of the print.
Other 5% for audit and soon needed dev ops. E.g. immediately liquidate to USD and give to appropriate people mostly Andre
45% to the DAO for future airdrops, community building, advertising, and developing. Set up in aragon as a legit DAO along with YFI pulling on chain levers it needs to be able to pull off chain levers. This should be timelocked. 10% release per year.
Edit: this is just brainstorming please feel free to finetune any numbers. But my point is just saying “oh print 300 tokens a week” in 3 months from now may not be what we want
I agree with you that less is more when it comes to YFI, but we cannot count on stable fiat values into the future. I am not so confident in stability of fiat currencies.
Also, I agree that the amount of inflation should be determined prior to determining distribution.
1 Like
Update:
Here are links to YIP-30 and YIP-31 as they stand. These will be formally proposed once the new governance UI is implemented. There have been some changes to the proposal since presentation and formalization as YIP(s), please see below.
Considerations:
- Ideas will be presented in clear, separate proposals. One for inflation model, one for LP/Multisig distribution, one for LP allocation distribution, and so forth. As they are rather dependent on each other, it will be important to digest and vote on all of them as they arise.
- Inflation model emits to 50k over 8 years now, rather than 10. It’s a slight change that provides a little more for LPs and Multisig funds on the front-end than the 10 year model.
- After reaching 50k total tokens after 8 years, the proposed inflation model ends with a 1% tail emission, rather than a 50k hard cap. While ‘burning the key’ is a hot idea, the authors of YIP-30 agree that it warrants more discovery and discussion, so it was removed.
- YIP-31 currently proposes to allocate 25% of further YFI emission to the Multisig. Any strong objections to starting with 75/25? Does starting with 50/50 to retain more flexibility and ‘dry powder’ in the Multisig make more sense?
- How should LP rewards allocation be distributed between yearn ecosystem?
Reference: https://github.com/iearn-finance/YIPS/tree/master/YIPS
(Note: YIP-30 is not yet officially proposed, and will be split out into two YIPs, 30 & 31)
1 Like
A lot of people agreed, but YIP0 prevailed. Whatever the views before that vote, out of respect for the process we should accept that there will be more than 30k YFI. That does not mean that 50k is the right cap or that 15k should go to LPs. In fact, YIP0 does not mandate that any YFI be distributed to LPs.
The more I see the arguments, the more important it seems to find a middle ground – a compromise between inflation/no inflation and between significant rewards for LPs / little for LPs.
Mint more but less than 50k. That’s a compromise on the cap. @yfi_whale originally proposed 42k at the high end. At this point 42k seems like a reasonable compromise.
Give 2k to the Multisig/DAO. This is also a compromise and consistent with the original proposal by @yfi_whale. The project needs some funds soon, and this seems reasonable. Sell it and put it in yearn products for liquidity, yield, and to a send a message to the defi community that we stand behind the products. By selling, 2k more YFI is available to those who want it, including those who want to participate in governance.
Do we need to incentivize LPs? Maybe, but it is not certain and it is also not certain that those incentives must be in the form of YFI. Mint 10k and let it be staked by the Multisig/DAO for the same rewards that all YFI holders will receive. Later we can vote how to distribute those rewards and whether and how to distribute those 10k YFI. It is possible the rewards are sufficient to fund a variety of projects, including LP rewards in the form of yearn tokens (but not YFI).
This increases YFI in circulation, gives the Multisig/DAO funding that could last forever, provides flexibility, and minimizes dilution.